Battery Ventures Raises $900M in Two New Funds

Battery Ventures has raised a new $650 million fund plus a $250 million side fund, just as it completes an internal intergenerational shift.

The venture-capital firm, which invests across technology sectors and across different stages of private companies’ life cycles, last raised a $750 million fund in 2010.

Dave Tabors, a Battery partner who is now co-leading the firm along with Scott Tobin, said the new funds will continue the partnership’s strategy of investing in startups that range from tiny to more mature. Battery will also continue putting money into different tech groups, including software, enterprise technology, media and industrial technology, he said.

“The strategy and pace will be pretty consistent” as in the past, Mr. Tabors said.

The new side fund will give Battery more flexibility to do later-stage deals, which typically require more capital than investments in out-of-the-garage startups, Mr. Tabors said. While about 50% to 60% of Battery’s capital in previous funds has been deployed towards later-stage deals, the side fund will allow for “an incremental pickup” of such activity so that closer to 60% of the assets will go to those more mature deals, he said.

Battery has previously invested in companies such as Groupon, ExactTarget, Splunk and Guidewire, which have gone public. Current investments include mobile video company Viddy and marketing software firm Marketo.

Along with the new funds, Mr. Tabors said the firm has shifted some of its partnership. Battery has just transitioned to its third-generation management led by him and Mr. Tobin, with the retirements of partners such as Tom Crotty. Several promotions have also taken place, Mr. Tabors said.

The new funds come amid what has been a generally flat environment for venture fundraising. Last year, U.S. venture fundraising totaled 154 funds that amassed $20.3 billion, down 1% in funds and up 1% in capital raised from 2011